When GE Manufacturing Solutions set up shop in far north Fort Worth, it faced an unusual challenge: hiring a workforce that knew nothing about locomotives.
Yet the fledgling operation blossomed, hiring almost 300 employees out of about 16,000 applicants almost two years after announcing the Fort Worth site in May 2011. Only five percent of its staff were not hired locally.
News that GE would open a manufacturing plant just west of Texas Motor Speedway to build between 250 and 300 locomotives a year turned heads. It also challenged Walter Amaya to assemble more than machines. The executive supply chain leader had to build a team capable of meeting that goal.
Three years later, now with 700 employees, Amaya reports success.
“We knew we were not going to be able to find experts on how to build locomotives in this area,” said Amaya, providing an update at a Feb. 29 North Area Fort Worth Chamber of Commerce luncheon at the Dallas/Fort Worth Marriott Hotel & Golf Club at Champions Circle.
“We wanted to create a team, to be the best manufacturer of locomotives in the world, and I’m proud to say now that we are meeting that very expectation,” Amaya said.
In a mammoth 1.5 million-square-foot facility, workers assemble locomotives meeting the Environmental Protection Agency’s rigorous Tier 4 emission standards, which took effect in 2015. The company sank $400 million into its Tarrant County operation, including purchasing and expanding an existing building to allow for more manufacturing space. That allows locomotives to be built in one location, whereas the work is done in multiple sites at its other operation, in Erie, Pennsylvania.
Abutting the locomotive plant is another production hub, a 300,000-square-foot structure built by GE to build electric drive wheels for mining trucks weighing 400 tons.
Only six months after placing a “now hiring” sign outside its Fort Worth location, GE hired almost 300 assemblers, welders, machinists and maintenance technicians. They needed to be trained quickly to help meet the growing demand for the company’s Evolution Series locomotive, which boasts 4,400 horsepower and a 70 percent reduction in emissions compared to its predecessor, the Tier 3 model.
“We spent a year training employees on how to interact as a team,” said Amaya, who remembers the first locomotive leaving the facility in January 2013. Many more employees have been hired since then, and many more locomotives have left the assembly line.
That says something for a workforce that increased production by one locomotive per week for every quarter since 2013. Its current production rate is 10 locomotives per week.
The workforce recently celebrated completion of its 800th locomotive.
What Amaya describes as “a pretty lean manufacturing site” could become even more efficient as the company explores new production technology.
“We’re starting to develop and use robotics technology,” said Amaya, emphasizing that what would be a first for the locomotive assembly industry would not come at the expense of human skills.
“Technology is a complement of our workforce,” said Amaya. He described assemblers, welders, pipe-fitters and other workers as more than adept, and focused, on their duties.
“God forbid you ask an assembler to move a pallet from point A to point B,” said Amaya, laughing.
Aside from exploring robotics, no plant expansion or significant hiring is planned. Instead, the Fort Worth operation continues to rely on Amaya’s formula for success.
“Have a plan, and make sure that everyone on your team shares that vision,” Amaya said.
GE tries to woo investors
with 'digital industrial' vision
General Electric is promising to boost its earnings by about 15 percent in each of the next three years and dole out $67 billion to shareholders as CEO Jeffrey Immelt tries to create a sleeker, "digital industrial" company.
The $67 billion will be paid through a combination of quarterly dividends and repurchases of GE's stock through 2018. The company, based in Fairfield, Connecticut, returned $33 billion to shareholders last year.
Reducing the amount of outstanding stock will also help GE meet its goal of increasing its adjusted annual earnings from $1.31 per share last year to more than $2 per share in 2018.
Immelt, 60, made the financial pledge while spelling out his vision for the 138-year-old company in a letter released Feb. 29 with GE's annual report.
The letter calls for General Electric Co. to become less bureaucratic and more innovative as Immelt strives to turn it into one of the world's 10 biggest software companies by 2020.
Immelt conceded the transformation won't be easy. "There is no blueprint for what we are trying to do and, at times, it will be messy," he wrote.
To help him sculpt GE into a nimbler company, he is getting advice from "early career leaders" in what he described as a "humbling" experience. "Through their eyes, I can see the evil nature of corporate bureaucracy; they are a good mirror for my own failings," wrote Immelt, who has been running GE since 2001.
As part of its makeover, GE has jettisoned most of its financial services and other operations that no longer fit into Immelt's strategy. Last year, GE negotiated sales totaling $157 billion
On the flip side, the company became an even bigger player in the energy industry with a $10.6 billion acquisition of the power and transmission division of French manufacturer Alstom.
In trying to reposition itself as a company on the cutting edge of technology, GE is hoping to recapture some of the luster it has lost amid problems in the financial services division, which once was among its brightest spots. Once the most valuable company in the world, GE has seen its market value decline by about $70 billion during the past decade. The company’s Fort Worth locomotive plant fits into that vision with a combination of old-line industrial focus and technological innovations that seek to reduce costs, streamline operations and increase performance, exemplified by the Tier 4 locomotive.
Meanwhile, investors have been gravitating to technology companies as the Internet and a variety of gadgets reshape society and the economy.
Technology bellwethers Apple Inc., Google parent Alphabet Inc. and Microsoft Corp. are now the world's three most valuable companies, and 12-year-old Facebook Inc. also is currently worth more than GE.
In his letter, Immelt asserted that GE is "under-owned by big investors." He is betting he can change Wall Street's perceptions about the company by encouraging his subordinates "to dream about new levels of growth and performance."
– Robert Francis of FWB contributed to this report.